CoStar Group posted 18% Q2 2026 revenue growth and a sharp EBITDA rebound, but the stock still trades at a rich multiple as Homes.com execution and earnings conversion remain key risks.
CoStar Group (CSGP) is a high-quality real estate data and marketplace platform moving through a sharp profitability recovery. Q2 2026 revenue reached $925M, up 18% year over year, while management reported adjusted EBITDA of $184M and described the quarter as a profitability inflection point. The investment case rests on recurring subscriptions, proprietary data, growing residential marketplaces, and operating leverage. The counterweight is a trailing P/E of 187.2x, thin current earnings, continued execution risk at Homes.com, and a cash balance that declined to $1.3B by June 30, 2026.
The latest dated insider transaction price in the supplied record was $32.00 on October 15, 2026. Against that reference, the analyst consensus target is $37.65, while this report assigns a $38.00 fair value estimate. That supports a Hold rating for moderate-risk investors with a medium-term horizon. CSGP offers meaningful earnings growth if management converts recent revenue gains into durable margins, but the stock already reflects part of that recovery.
The strongest evidence comes from the combination of 61 consecutive quarters of double-digit revenue growth, a 93% CoStar renewal rate, 19% CoStar subscriber growth, and positive residential segment adjusted EBITDA in Q2 2026. These facts show a business with real commercial traction rather than a story built only on future promises. Still, 2025 operating income was negative $72M and net income was only $7M, so the profitability transition remains relatively young.
CoStar Group (CSGP), founded in 1986 and headquartered in Arlington, Virginia, provides real estate information, analytics, online marketplaces, lease management tools, and 3D spatial technology. Its product portfolio covers commercial property, apartments, homes for sale, hospitality, debt analytics, rural land, and business-for-sale marketplaces. The company had 8,441 employees in the corporate information provided.
The portfolio creates a useful mix of data subscriptions and marketplace monetization. CoStar and STR sell specialized information and analytics, while LoopNet, Apartments.com, Homes.com, and Domain monetize listings, leads, and advertising. Matterport adds 3D capture and digital twin software. This mix gives CSGP several ways to monetize the same property, customer, or transaction workflow.
Commercial Real Estate generated $481M of Q2 2026 revenue, up 8% year over year, according to management. The segment produced adjusted EBITDA of $172M. CoStar itself generated $337M of revenue, up 9%, and its subscriber base rose 19% to 327,000. Net new bookings to brokers increased 48%, while CoStar renewal rates held at 93% and its Net Promoter Score reached 68.
LoopNet generated $87M of Q2 revenue, up 14%. Paid listings in the United States increased 9% to 220,000, while paid listings grew 24% in Canada and 52% in the United Kingdom. European revenue rose 10%, and average monthly unique visitors increased 88%. The asset-based pricing model is designed to charge more for valuable listings while improving adoption among smaller advertisers.
Other commercial revenue was $57M and declined 5% year over year, primarily because of lower transaction volumes at Ten-X. Management is separating Ten-X from LoopNet and reducing costs. Ten-X revenue declined by $4M during the restructuring, while the company reported $7M of year-to-date cost reductions.
Residential revenue reached $444M in Q2, up 33% year over year, and the segment generated positive adjusted EBITDA for the first time since the Homes.com launch. Apartments.com produced $318M of revenue, up 9%, with nearly 93,000 paid properties and monthly renewal rates of 99%. Homes.com revenue grew 66% to $28.5M, with more than 36,000 agent subscribers, up 107% year over year.
The segment mix is changing quickly. Apartments.com provides the current residential earnings base, while Homes.com supplies the faster growth rate. Homes.com subscribers promoted nearly 305,000 active listings in Q2, equal to 9.3% of the 3.2 million homes for sale in the United States. The planned rollout of premium advertising tiers gives the platform a second monetization layer beyond base subscriptions.
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The flagship CoStar platform combines property records, listings, lease transactions, sales comparables, ownership data, market trends, and workflow tools. Q2 2026 revenue of $337M, 327,000 subscribers, a 93% renewal rate, and a 68 NPS score provide measurable evidence of customer adoption and retention.
CoStar Rent Benchmark launched in June using 4 million AI-abstracted leases and lease documents. The product is built around actual rent data rather than asking rents or broker reports. CoStar also launched public record search in the United Kingdom, covering 6.9 million freehold and leasehold ownership titles and 6.8 million properties and parcel groups.
Debt Solutions provides a particularly attractive extension because it combines CoStar information with a lender's proprietary loan data. Three hundred lender clients contribute information on more than 100,000 active loans representing over $1.2T of outstanding debt on an anonymized and aggregated basis. Net new monthly bookings exceeded $4M in Q2, up 96% year over year.
CSGP's central advantage is the accumulated scale of its proprietary data. Management says the company has invested more than $5B in its database over 40 years and employs more than 1,500 researchers. That investment creates a difficult starting point for competitors attempting to match property coverage, transaction history, ownership records, and market benchmarks.
AI is becoming an operating tool and a customer-facing product. Apartments.com AI users completed approximately 500,000 sessions within weeks of launch, spent three times longer on the site than non-AI users, viewed twice as many listings, and generated a 256% increase in traffic-to-lead conversion. Homes AI users spent more than 17 minutes on the site, conducted three times as many searches, and favorited five times as many properties.
Matterport strengthens the product stack with digital twins, E57 import, Gaussian splat exterior views, and high-resolution interior panoramas. Management has restarted hardware development and produced prototypes of Matterport 4, with delivery anticipated in late 2027. The combination of property data, listings, AI search, and spatial media gives CSGP more ways to improve lead quality and customer workflow.
Network effects reinforce the data advantage. Apartments.com delivered more than 228 million renter visits in Q2, while Homes.com rentals generated more than 11% of Apartments.com's traffic. More traffic supports more listings, and more listings improve the value of the marketplace to brokers, owners, and agents. That is a useful flywheel, although the company must keep spending efficiently to maintain it.
CSGP has a software and data operating model rather than a traditional physical supply chain. Its critical inputs are researchers, engineers, sales staff, proprietary records, customer-submitted data, property listings, and third-party data rights. Sales headcount was 1,975 at June 30, 2026, up 8% year over year.
The company is expanding its data collection footprint. In Australia, 124 researchers and photographers were covering 30,000 listings, 23,000 property profiles, and more than 10,000 sale and lease transactions. In France, the CoStar launch covers more than 290,000 properties, 385,000 commercial tenants, 90,000 availabilities, and 75,000 lease and sales comparables.
CSGP also completed a consolidated headquarters campus in Richmond, Virginia, which management said can support growth from 2,500 employees to 4,000 with limited additional capital construction. The company plans to use the facility to reduce fragmented lease costs and improve operating efficiency. The planned Zonda acquisition would add new home construction data and serve more than 3,000 builders, developers, lenders, manufacturers, and suppliers across North America.
CoStar operates in a large real estate information and marketplace opportunity. Company materials place the global addressable market for current core products above $100B. The business is not limited to brokerage listings: it also addresses property analytics, lease administration, hospitality benchmarking, lending risk, residential lead generation, and new home construction.
The near-term expansion areas are specific and measurable. Company materials cite a $300M opportunity for lender origination, a $120M opportunity for corporate real estate integration, a $200M opportunity for new homes, and opportunities above $340M in European LoopNet expansion. France and Australia also add geographic growth avenues.
Residential marketplace demand remains commercially important even in a soft operating environment. Q2 multifamily absorption was approximately 139,000 units, down 3% year over year, while 2026 deliveries are projected to decline 23%. Roughly 40% of communities were offering concessions. Those conditions increase the value of high-quality leads and measurable leasing outcomes, which supports Apartments.com's pitch to property owners.
The strategic opportunity is to move customers from a single listing or data product into a broader workflow. CoStar can sell research, lease tools, debt analytics, and marketplaces to overlapping real estate professionals. The resulting cross-sell opportunity supports management's long-range plan for adjusted EBITDA margin expansion from 20% in 2026 to 35% in 2030.
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CSGP serves commercial brokers, property owners, real estate investment trusts, insurance companies, asset managers, lenders, developers, appraisers, government agencies, hospitality operators, and corporate real estate teams. Residential customers include apartment owners, property managers, home-sale agents, builders, and landlords.
Retention is strongest where the product is embedded in a recurring workflow. CoStar renewal rates were 93%, customers with five years or more of tenure renewed at 94%, and Apartments.com monthly renewal rates were 99%. CSGP's overall contract renewal rate was 89%, while 72% of subscription revenue came from annual contracts in Q2.
The customer value proposition is increasingly tied to measurable outcomes. PERQ found that Apartments.com leads converted at 2.5 times the rate of the next closest competitor across more than 1,000 properties. Homes.com reported an 11x first-year return on investment for agent subscribers, while its monthly cancellation rate fell to 2.4% in June from 6.5% in June 2025.
CoStar competes across several markets, so its competitive set changes by product. CBRE (CBRE) and JLL (JLL) compete in commercial real estate research, analytics, and technology-enabled client services. Zillow Group (Z) is the clearest consumer-facing competitor in residential search and rentals. Realtor.com, Redfin (RDFN), broker websites, and specialized listing providers also compete for traffic, listings, and leads.
CSGP's strongest competitive evidence is in commercial data depth and residential engagement. Management reported 327,000 CoStar subscribers, 93% renewal rates, and a database built from 4 million actual leases for Rent Benchmark. Apartments.com reported 66% unaided awareness among apartment seekers, 25 points ahead of its nearest competitor, and 2.5 times the lead conversion rate cited by PERQ.
Competition remains active. Management said a competitor is discounting aggressively in multifamily rentals, while Apartments.com's average revenue per property declined 3.6% year over year because of a shift toward smaller communities. Zillow's network visits declined 35% year over year in June according to comScore, but traffic leadership can change quickly when competitors alter pricing, inventory access, or product design.
The moat is therefore meaningful but not absolute. Proprietary data, brand awareness, renewal rates, and traffic scale support pricing power. At the same time, CSGP must defend data rights, invest in AI, and maintain customer value while competitors spend to gain share.
Real estate transaction activity remains cyclical, and CSGP's Q2 results show both sides of that cycle. Other commercial revenue declined 5% because of lower Ten-X transaction volumes, while recurring CoStar and LoopNet revenue continued to grow. The subscription base reduces exposure to transaction volatility but does not eliminate it.
Multifamily conditions are mixed. Q2 absorption of 139,000 units was down 3% year over year, 2026 deliveries are projected to fall 23%, and about 40% of communities offered concessions. The combination gives property owners a reason to prioritize lead quality and leasing efficiency, which supports Apartments.com's product positioning.
Geopolitical risk was visible in STR's international business. Management said the Iran conflict weighed on the Middle East, yet STR continued its expansion with Alistithmar in Saudi Arabia and secured a significant Indian customer win with Samhi Hotel Investments. That outcome shows international demand can persist even when regional conditions become more difficult.
Regulatory and intellectual-property issues also matter. The FTC and multiple state attorneys general sued Zillow Group (Z) alleging an unlawful agreement that reduced competition in multifamily rental advertising. Separately, CSGP sued Zillow over the alleged unauthorized use of tens of thousands of CoStar-owned apartment photographs. These legal matters add uncertainty to the competitive structure of rental advertising.
Cash fell to $1.3B by June 30, 2026 even after CoStar generated $184M of adjusted EBITDA in Q2, leaving the balance sheet solid but less flexible than before.
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Get Full Access →Q2 2026 revenue rose 18% to $925M and adjusted EBITDA more than doubled to $184M, but 2025 operating income was still negative $72M.
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Get Full Access →Management is now showing a profitability inflection with 61 consecutive quarters of double-digit revenue growth, 93% CoStar renewal rates, and positive residential adjusted EBITDA.
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Get Full Access →At a trailing P/E of 187.2x, CSGP’s valuation already prices in a lot of the recovery even after the stock’s recent operating improvement.
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Get Full Access →The report’s $38 fair value sits just above the $37.65 analyst consensus target and supports a Hold rating versus a $32.00 insider transaction reference.
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Get Full Access →CoStar Group has the ingredients of a durable compounder: proprietary real estate data, recurring subscriptions, high renewal rates, large marketplaces, and a growing AI product layer. Q2 2026 supplied the clearest evidence yet that revenue growth can translate into stronger profitability, with $925M of revenue and $55M of net income.
The investment case is still a transition story. CSGP must turn the Q2 margin improvement into consistent annual earnings, protect Apartments.com from price competition, scale Homes.com advertising, and integrate Zonda without weakening the balance sheet. The $1.3B June cash balance and $1.0B debt balance provide flexibility, but continued repurchases and expansion require disciplined capital allocation.
At the $38.00 fair value estimate, the stock offers a credible medium-term opportunity but lacks the discount required for a Strong Buy. A Hold rating best matches the evidence: the business is improving, the growth engine is real, and the valuation already reflects a meaningful portion of the recovery.
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CoStar Group, Inc. (CSGP) fell sharply after hours after Q3 results topped profit expectations but missed revenue estimates. The company raised full-year guidance, yet investors focused on the sales shortfall and the stock’s rich valuation, triggering a steep repricing in extended trading.
CoStar Group, Inc. (CSGP) falls sharply after hours after cutting full-year revenue guidance, even as Q2 revenue, EBITDA, and net income all posted strong gains. The selloff reflects investor concern about slower forward growth and a richer valuation, with analyst downgrades adding to the pressure.
CoStar Group posted 23% revenue growth and doubled adjusted EBITDA, but ongoing investment in Homes.com and weaker GAAP profitability keep the stock at Hold. The commercial franchise remains strong, yet the valuation already reflects a meaningful recovery.